There’s Money in Texas Wind

[greencat]

SWEETWATER, Tex. — The wind turbines that recently went up on Louis Brooks’s ranch are twice as high as the Statue of Liberty, with blades that span as wide as the wingspan of a jumbo jet. More important from his point of view, he is paid $500 a month apiece to permit 78 of them on his land, with 76 more on the way.

“That’s just money you’re hearing,” he said as they hummed in a brisk breeze recently.

Texas, once the oil capital of North America, is rapidly turning into the capital of wind power. After breakneck growth the last three years, Texas has reached the point that more than 3 percent of its electricity, enough to supply power to one million homes, comes from wind turbines.

Texans are even turning tapped-out oil fields into wind farms, and no less an oilman than Boone Pickens is getting into alternative energy.

“I have the same feelings about wind,” Mr. Pickens said in an interview, “as I had about the best oil field I ever found.” He is planning to build the biggest wind farm in the world, a $10 billion behemoth that could power a small city by itself.

Wind turbines were once a marginal form of electrical generation. But amid rising concern about greenhouse gases from coal-burning power plants, wind power is booming. Installed wind capacity in the United States grew 45 percent last year, albeit from a small base, and a comparable increase is expected this year.

At growth rates like that, experts said, wind power could eventually make an important contribution to the nation’s electrical supply. It already supplies about 1 percent of American electricity, powering the equivalent of 4.5 million homes. Environmental advocates contend it could eventually hit 20 percent, as has already happened in Denmark. Energy consultants say that 5 to 7 percent is a more realistic goal in this country.

The United States recently overtook Spain as the world’s second-largest wind power market, after Germany, with $9 billion invested last year. A recent study by Emerging Energy Research, a consulting firm in Cambridge, Mass., projected $65 billion in investment from 2007 to 2015.

Despite the attraction of wind as a nearly pollution-free power source, it does have limitations. Though the gap is closing, electricity from wind remains costlier than that generated from fossil fuels. Moreover, wind power is intermittent and unpredictable, and the hottest days, when electricity is needed most, are usually not windy.

The turbines are getting bigger and their blades can kill birds and bats. Aesthetic and wildlife issues have led to opposition emerging around the country, particularly in coastal areas like Cape Cod. Some opposition in Texas has cropped up as well, including lawsuits to halt wind farms that were thought to be eyesores or harmful to wetlands.

But the opposition has been limited, and has done little to slow the rapid growth of wind power in Texas. Some Texans see the sleek new turbines as a welcome change in the landscape.

“Texas has been looking at oil and gas rigs for 100 years, and frankly, wind turbines look a little nicer,” said Jerry Patterson, the Texas land commissioner, whose responsibilities include leasing state lands for wind energy development. “We’re No. 1 in wind in the United States, and that will never change.”

Texas surpassed California as the top wind farm state in 2006. In January alone, new wind farms representing $700 million of investment went into operation in Texas, supplying power sufficient for 100,000 homes.

Supporters say Texas is ideal for wind-power development, not just because it is windy. It also has sparsely populated land for wind farms, fast-growing cities and a friendly regulatory environment for developers.

“Texas could be a model for the entire nation,” said Patrick Woodson, a senior development executive with E.On, a German utility operating here.

The quaint windmills of old have been replaced by turbines that stand as high as 20-story buildings, with blades longer than a football field and each capable of generating electricity for small communities. Powerful turbines are able to capture power even when the wind is relatively weak, and they help to lower the cost per kilowatt hour.

Much of the boom in the United States is being driven by foreign power companies with experience developing wind projects, including Iberdrola of Spain, Energias de Portugal and Windkraft Nord of Germany. Foreign companies own two-thirds of the wind projects under construction in Texas.

[Weirdharold]

No doubt wind and solar both are going to be coming more and more to the forefront.... the problem is being able to figure out which of the companies are truly worth investing in, and that is not an easy task!

[Grizzums]

Originally Posted by Weirdharold

No doubt wind and solar both are going to be coming more and more to the forefront.... the problem is being able to figure out which of the companies are truly worth investing in, and that is not an easy task!

I'm with both of you on the potential of another bull hitting these areas of Alt Energy, especially with over $100 bbl oil and falling interest rates. I have pretty much been out of this "traders" market lately w/ school and all, but I did enter a position in AMSC on Monday.

[Grizzums]

Originally Posted by Grizzums

I'm with both of you on the potential of another bull hitting these areas of Alt Energy, especially with over $100 bbl oil and falling interest rates. I have pretty much been out of this "traders" market lately w/ school and all, but I did enter a position in AMSC on Monday.

Just crossed the 50dma.

"AMSC Receives First PowerModule-Based Electrical System Orders for Commercial Marine Applications"

http://news.moneycentral.msn.com/tic...304&id=8276774

[Grizzums]

http://bloomberg.com/apps/news?pid=2...rg0&refer=news

[Grizzums]

"March 12 (Bloomberg) -- General Electric Co. and Vestas Wind Systems A/S, the world's two biggest wind-turbine makers, are reaping benefits from record orders by U.S. utilities racing to add generating capacity even as they face the loss of subsidies.
GE, Vestas and Siemens AG stand to gain although the extension of the production tax credit, due to expire in December, is stalled in Congress. Four years ago, the last time the credit wasn't renewed, orders came to a near standstill. Now, rising natural gas prices and state greenhouse-emission laws are fueling a surge in demand for wind power, which accounts for 30 percent of new generating capacity and may boost GE's wind-turbine sales 25 percent to $6 billion this year.

Xcel Energy Inc., the biggest U.S. provider of wind power, is buying 67 GE turbines for a Minnesota wind farm because the state requires it to get almost a third of its power from non- polluting sources. That will help GE reach operating income margins of 17 percent on wind turbines based on this year's sales, as much as 5 percentage points greater than those of Danish competitor Vestas. Wind is the fastest-growing unit at GE Energy, the world's biggest power-plant equipment maker.

``Customers are giving billions of dollars of orders already because they're afraid they're going to lose their spot in line,'' John Krenicki, who runs the GE Energy division, said March 5. GE posted more than $4.5 billion in wind-turbine sales last year, the most since it bought the business in 2002 for less than $300 million from Enron Corp. GE's total revenue last year was $172.7 billion.

Alternative Play

GE became the biggest U.S. supplier last year with 45 percent of the market and has announced $1.7 billion in orders since Feb. 28, including its second billion-dollar contract since November with Invenergy Wind LLC. Chicago-based Invenergy has developed wind farms for companies including MidAmerican Energy Holdings, the utility owned by Warren Buffett's Berkshire Hathaway Inc.
Operating profit margins at GE's wind division, now ``mid- single digit,'' may widen to at least 10 percent as more turbines are installed and service contracts signed, said Nicole Parent, an analyst with Credit Suisse in New York.

``In our universe, GE is the best way to play the alternative energy end market, particularly as it becomes a bigger portion of GE's total portfolio,'' Parent wrote in a Feb. 11 note. She predicts the shares will rise 21 percent in the next 12 months to $41.

Betting on Wind

GE Wind's profit margin will eventually be about $1 billion, Vice Chairman John Rice said at an investor conference last month. If it reaches that this year, when sales are forecast to rise to $6 billion, the profit margin would be 17 percent.
Krenicki said global wind margins should improve 2 percentage points this year. Vestas said Feb. 28 that earnings margins this year before interest and tax will be 10 percent to 12 percent.
Since 2004, General Electric's wind-turbine production has increased sixfold and sales have quadrupled.

``The markets for the first time are willing to take a bet'' even if subsidies aren't renewed by December, said Rice, who oversees the wind division as part of GE Infrastructure.
U.S. utilities last year added wind turbines producing an estimated 5,244 megawatts, a 45 percent increase, according the American Wind Energy Association. Installations this year may equal last year's record as companies rush to finish projects before the credit expires, the Washington-based trade organization said.
GE rose 56 cents, or 1.7 percent, to $33.96 at 4:01 p.m. in New York Stock Exchange composite trading. Siemens declined 10 cents to 82.60 euros, while Vestas rose 3 kroner to 517 kroner.

`Great Profits'

Almost all of GE's U.S. orders last year went to states that had standards for renewable energy, Victor Abate, who runs the company's wind, solar and other renewable units, said in an interview.
Xcel must get 30 percent of its power in Minnesota and 20 percent in Colorado from low- or no-emission sources such as wind, solar, or nuclear by 2020. The federal tax credits will allow the company to deduct 2 cents for each kilowatt-hour generated.
When the subsidy expired in 2004, about 389 megawatts of generating equipment was added in the U.S., down from 1,687 a year earlier, according to the AWEA.
``Right now the manufacturers are making great profits and allocating capacity and the developers are taking on the risk that the credits won't be renewed,'' said Kevin Landis, co- founder and chief investment officer at Firsthand Capital Management in San Francisco, which manages $750 million including Vestas shares.

No Opposition

Vestas, the world's biggest wind turbine maker, opened its first U.S. manufacturing plant March 5 in Windsor, Colorado. Siemens is opening a plant in Iowa, while GE has partnered with two companies to expand wind-blade production in New York and Iowa.
Funding to renew the tax credit, part of the energy bill, passed the House of Representatives on Feb. 27 and has yet to make it through the Senate. President George W. Bush has threatened to veto any legislation that pays for the credit with funds now used to subsidize oil and gas exploration.
Investors, and company executives, are betting the credit will be restored once a new U.S. president is in office. [Edit - Whether or not you agree with this or not, imo, it is likely to be a reality at this point

``Partisan bickering isn't going to kill the production tax credit,'' said Jim Halloran, who manages about $35 billion at National City Private Client Group in Cleveland, including 12.7 million GE shares. ``Nobody who matters in Washington is opposed to it.''
Andreas Nauen, who runs the Siemens Wind unit, said in a February interview that a lengthier U.S. subsidy would help steady demand. The more certain a subsidy, the easier it is for utilities to commit, he said.
To enable Vestas to expand in the U.S., a years-long subsidy is needed, CEO Ditlev Engel said in a March 8 interview.
``Our desire is really to have a long-term vision of the American policies going forward instead of having this bumper cycle -- will it be renewed, will it not be renewed, isn't very helpful,'' he said. "

[Grizzums]

I am not a fan of GE (in general) but putting that aside, it is a good candidate to keep an eye on right now. If you could catch it down near $33, I like it....a good deal. I picked some of this and WFR up yesterday as the market was getting "pumped up" - they were both on my watch list. I'm with GC on alt energy, there will be money to be made here.

Here are charts for GE and WFR for you.

http://stockcharts.com/h-sc/ui?s=GE&...d=p23673379323

http://stockcharts.com/h-sc/ui?s=WFR...d=p23673379323



On GE - The CEO has been loading up, and so have I soon after him.
http://sec.gov/cgi-bin/browse-edgar?...ion=getcompany
http://sec.gov/Archives/edgar/data/4...5X02/edgar.xml
http://sec.gov/Archives/edgar/data/4...5X02/edgar.xml

Dividend Yield 3.91% <-- what is that, more than what you might get in a 10 yr treasury at this point, right?

WFR - Here is what I wrote in a newsletter out to some folks yesterday ("The Emancipated Sheep Report")....

"Today, I opened up a position on WFR as they are priced at a premium but I believe with the price of oil at record levels near $110 bbl that Solar will continue to do well. There are some solar bear scenarios so consider this an “emancipated sheep” view but I consider this a nice play in this sector with protection against these speculated oversupplies of solar module scenarios because of its cornering of its niche market for polysilicon wafers which are currently in tight supply and should continue to be well into 2009. They also have long term fixed contracts in place. This time from now to 09 should allow ample time for the company to take advantage of favorable spot prices to sign additional fixed long term contracts. Even with a bearish market in play overall....this one just may buck the trend and head towards the century mark"

Good Luck!

[Grizzums]

Wind? Oh, but oil is so much more attractive to the eye....I mean look at those beautiful smoke formations.

[Grizzums]

Originally Posted by Grizzums

I am not a fan of GE (in general) but putting that aside, it is a good candidate to keep an eye on right now. If you could catch it down near $33, I like it....a good deal. I picked some of this and WFR up yesterday as the market was getting "pumped up" - they were both on my watch list. I'm with GC on alt energy, there will be money to be made here.

Here are charts for GE and WFR for you.

http://stockcharts.com/h-sc/ui?s=GE&...d=p23673379323

http://stockcharts.com/h-sc/ui?s=WFR...d=p23673379323



On GE - The CEO has been loading up, and so have I soon after him.
http://sec.gov/cgi-bin/browse-edgar?...ion=getcompany
http://sec.gov/Archives/edgar/data/4...5X02/edgar.xml
http://sec.gov/Archives/edgar/data/4...5X02/edgar.xml

Dividend Yield 3.91% <-- what is that, more than what you might get in a 10 yr treasury at this point, right?

WFR - Here is what I wrote in a newsletter out to some folks yesterday ("The Emancipated Sheep Report")....

"Today, I opened up a position on WFR as they are priced at a premium but I believe with the price of oil at record levels near $110 bbl that Solar will continue to do well. There are some solar bear scenarios so consider this an “emancipated sheep” view but I consider this a nice play in this sector with protection against these speculated oversupplies of solar module scenarios because of its cornering of its niche market for polysilicon wafers which are currently in tight supply and should continue to be well into 2009. They also have long term fixed contracts in place. This time from now to 09 should allow ample time for the company to take advantage of favorable spot prices to sign additional fixed long term contracts. Even with a bearish market in play overall....this one just may buck the trend and head towards the century mark"

Good Luck!

Bump for GE

I had a feeling Mr. Immelt new something was up.....

http://stockcharts.com/h-sc/ui?s=GE&...d=p35131950652

Good defensive play for times like we are in as well.

[Grizzums]

Originally Posted by Grizzums

Just crossed the 50dma.

"AMSC Receives First PowerModule-Based Electrical System Orders for Commercial Marine Applications"

http://news.moneycentral.msn.com/tic...304&id=8276774

Bump for AMSC...

http://stockcharts.com/h-sc/ui?s=AMS...d=p93363019217

"AMSC Receives New Orders for Wind Turbine Electrical Components from Canada and China"

http://news.moneycentral.msn.com/tic...39&Symbol=AMSC